10 Common Myths About Buying a Home — Busted!

Homebuying myths can cost you thousands — or keep you from buying when you're ready. From the "20% down payment" myth to misconceptions about credit scores and timing, outdated advice holds buyers back.

This guide debunks common homebuying myths so you can make confident decisions based on reality — not outdated conventional wisdom.

Key Takeaways

20% Down May Not be Necessary:

Most first-time buyers put down less than 10%. Programs like FHA, VA, and USDA offer low- or zero-down-payment options.

You Don’t Need Perfect Credit:

Each loan program and lender varies. For example, the FHA program allows scores as low as 580 (the exact credit score is up to individual lenders). While higher scores may allow you to get better rates, you don't need perfect credit to qualify.

Renting Isn't Throwing Money Away:

Renting provides housing and flexibility. It's smart financial planning when you're not ready to buy.

You Can Negotiate More Than You Think:

From purchase price to closing costs, repairs, and even mortgage rates — nearly everything is negotiable.

💡 Pro Tip: The biggest myth? All lenders offer the same rates. After you apply for a loan and receive your Loan Estimate, upload it to Fincast and watch vetted lenders compete to beat your terms — no extra credit pulls, no spam, just potentially better rates or terms.

Myth #1: You Need 20% Down 🏦

The Myth:

You must save 20% of the home's purchase price before you can buy a home.

The Reality:

Most first-time buyers put down less than 10%, not 20%. Many loan programs require far less:

• Conventional loans: 3% down minimum

• FHA loans: 3.5% down

• VA loans: 0% down for eligible veterans

• USDA loans: 0% down for eligible rural/suburban areas, and borrowers who meet the income guidelines

Exact guidelines vary by lender, so be sure to shop around to find one that works with your situation. Also, keep in mind that you may pay mortgage insurance with a down payment lower than 20%. It’s imperative that you look at the big picture to make a confident choice.

Myth #2: You Need Perfect Credit 📊

The Myth:

Only borrowers with excellent credit (750+) can qualify for a mortgage.

The Reality:

Credit score minimums vary by loan type and lender:

• FHA loans: 580 minimum (some lenders accept 500 with 10% down)

• Conventional loans: Typically 620+ required (varies by lender)

• VA/USDA loans: No official minimum (though some lenders prefer 620+)

Higher scores often get better interest rates, but you don't need perfection to qualify. Focus on improving your score over time, but don't let imperfect credit stop you from exploring your options.

Myth #3: Renting is Throwing Money Away 💸

The Myth:

Rent payments are wasted money. Every dollar should go toward owning.

The Reality:

Rent buys you housing, flexibility, and freedom from maintenance costs. It's not a waste — it's a service.

Renting makes financial sense when:

• You're building savings for a down payment

• You might relocate within 5 years

• Local home prices are significantly inflated

• You value mobility and low responsibility

Remember: homeownership has costs too — maintenance, repairs, property taxes, insurance, and interest. Smart renting beats rushed buying.

Myth #4: You Should Wait for the Perfect Market ⏰

The Myth:

Wait until prices drop and interest rates hit rock bottom before buying.

The Reality:

Timing the market perfectly is nearly impossible. Prices and rates move unpredictably. While you wait for ideal conditions, you could be:

• Paying rent that builds no equity

• Missing out on equity gains if prices rise

• Potentially facing even higher rates or prices later

Better strategy: Buy when you're personally ready and plan to hold for the long term. You can refinance if rates drop. Focus on your circumstances, not speculation.

Myth #5: Pre-Approval Guarantees Your Loan 📋

The Myth:

Once pre-approved, your loan is guaranteed.

The Reality:

Pre-approval is conditional. Lenders verify everything again before closing. Your loan can fall through if you take on new debt, change jobs, your credit score drops, or you don’t satisfy other conditions the lender requires.

Keep finances stable from pre-approval through closing — no big purchases, job changes, or new credit.

Myth #6: Student Loans Disqualify You 🎓

The Myth:

You can't buy a home if you have student loan debt.

The Reality:

Many homeowners have student loans. Lenders care about your debt-to-income ratio (many lenders prefer under 43%), not whether you have debt. Consider payment plan options to lower monthly payments if needed. Millions of people buy homes with student debt every year.

Myth #7: Everything is Non-Negotiable 🤝

The Myth:

List price, closing costs, and loan terms are fixed. Take it or leave it.

The Reality:

Nearly everything is negotiable:

• Purchase price — Offer based on comps and condition

• Closing costs — Ask seller to contribute

• Repairs — Request fixes or credits after inspection

• Closing date — Adjust to fit both parties

• Included items — Negotiate appliances, furniture

• Mortgage rates — Shop lenders or negotiate rate/points

Pro tip: This is where Fincast shines. Upload your Loan Estimate and let lenders compete — you'll quickly see how negotiable rates really are and with little effort.

Myth #8: Skip the Inspection to Win the Offer 🔍

The Myth:

In competitive markets, waive the inspection contingency to make your offer more attractive.

The Reality:

Never waive the inspection. It's your only protection against hidden problems — foundation issues, water damage, electrical hazards, and roof failure. Instead, strengthen your offer with higher earnest money, shorter inspection period, or flexible closing date.

Myth #9: Closing Costs Are Minimal 💰

The Myth:

Closing costs are just a few hundred dollars.

The Reality:

Closing costs typically run 2-5% of the purchase price. For a $300,000 home, that's $6,000-$15,000 including loan fees, appraisal, title insurance, recording fees, and prepaid taxes/insurance (actual costs vary by location and market).

Budget accordingly and consider negotiating for seller contributions.

Myth #10: All Lenders Offer the Same Rates 📉

The Myth:

Mortgage rates are standardized. It doesn't matter which lender you choose.

The Reality:

Rates vary significantly between lenders. Even a 0.25% difference in rate can save you a significant amount of money over your loan term.

This is exactly why shopping around matters — and why Fincast exists. Instead of manually applying with multiple lenders (credit pulls, paperwork, spam), upload one Loan Estimate to Fincast and let vetted lenders compete to offer better rates or terms.

The result? You see real offers side-by-side and choose the best deal — no guesswork, no hassle, just savings.

How Fincast Busts the Biggest Myth of All 🚀

The biggest myth in mortgage shopping? That you're stuck with the first offer.

Here's how Fincast works:

• Apply with one lender — Complete a loan application and receive your Loan Estimate

• Upload to Fincast — Share your Loan Estimate securely

• Watch lenders compete — Vetted lenders review and potentially offer better terms

• Choose the best deal — Compare side-by-side and potentially save thousands over the life of your loan

No extra credit pulls. No spam. Just transparency. Because the only myth you should believe? That getting the best mortgage rate should be simple.

FAQs

1. Do I really not need 20% down?

Correct! Most first-time buyers put down much less than 20%. The FHA requires a 3.5% down payment; the VA and USDA offer 0% down options for those who qualify.

2. Can I buy with a 600 credit score?

There may be lenders and markets where a 600 credit score works. FHA lenders generally accept scores as low as 580 (some FHA lenders allow 500 with 10% down, though this varies and is far less common). Conventional lenders typically require 620+. Your rate will be higher with lower scores, but you may still qualify.

3. Should I wait for interest rates to drop?

Not necessarily. Focus on your personal readiness. You can refinance if rates drop later, but you can't get back the equity-building time you lose by waiting.

4. Is it true I can negotiate everything?

Almost everything — purchase price, closing costs, repairs, appliances, and even mortgage rates. Don't accept the first offer. Negotiate.

5. How does Fincast help me get better rates?

Submit your Loan Estimate once, and vetted lenders try to offer something better. You see real offers side-by-side without multiple applications or credit pulls.

Bottom Line

Don't let outdated myths keep you from homeownership or cost you thousands in overpayment. The truth is:

• You don't need 20% down or perfect credit

• Renting isn't failure — it's smart planning when you're not ready

• You can buy with student loans

• Nearly everything is negotiable

• Never skip the home inspection

• Shopping lenders saves thousands (and Fincast makes it effortless)

Arm yourself with facts, not fiction. And when you're ready to buy, use Fincast to ensure you're not overpaying for your mortgage — because busting myths is just the beginning.

Pro Tips (Save These!)

• Question conventional wisdom — many "rules" are outdated

• Focus on the down payment percentage that works for YOUR situation

• Improve credit over time, but don't wait for perfection

• Never waive inspection contingency — protect your investment

• Upload your Loan Estimate to Fincast to compare real lender offers

• Negotiate everything — purchase price, closing costs, repairs, rates

• Budget for closing costs (2-5% of the purchase price) — not just down payment

Action Checklist

• Stop believing you need 20% down

• Check your credit score, but don't obsess over perfection

• Research low down payment loan options (FHA, VA, USDA, Conventional 3%)

• Budget for closing costs in addition to the down payment

• Always schedule a professional home inspection

• Get pre-approved and receive your Loan Estimate

• Upload your Loan Estimate to Fincast for comparison

• Negotiate purchase price, closing costs, and repairs

• Choose the best mortgage offer with confidence

👉 Ready to bust the biggest myth? Upload your Loan Estimate to Fincast and discover how much better rates can be when lenders compete for your business.